The south coast club were on the brink of going out of business over the summer until Swiss businessman Markus Liebherr completed his takeover last week.
Liebherr's first action was to sack Dutchman Mark Wotte as first-team coach and he has now turned to Pardew, who has achieved promotions with Reading and West Ham and also took the Hammers to the 2006 FA Cup final.
Liebherr said: "We are delighted to have been able to attract Alan to St Mary's from a very strong field of candidates we identified and who expressed an interest in joining us.
"Alan has a strong track record and impressed us with his vision, commitment and ambition."
The ex-Crystal Palace and Charlton midfielder said: "I'm proud and very excited to be joining a club with an immense history and huge potential.
"Everything is here in terms of quality of stadium, training facilities and, now, financial stability.
"I'm look forward to working with the squad and with the executive management as part of a team committed to achieving progress.
"Of course, I will bring my own style of football management to the club, but as part of a plan being evolved at the club to achieve long-term success."